Mike Pero Mortgages sale heads to court

A bitter scrap between the joint owners of mortgage broker Mike Pero Mortgages has escalated into legal action with millions of dollars at stake.

The two, listed company NZF Group and Australian lender Liberty Financial, agreed in September to end their relationship with Liberty buying out NZF.

But the deal was soon in doubt after an independent valuation of Mike Pero Mortgages said NZF's stake was worth just $2.8 million, well below its carrying value on NZF's balance sheet of $7.6m.

With the transaction requiring approval from NZF shareholders, Liberty has taken court action to promote a 'yes' vote.

In a statement published to the stock exchange this morning, NZF said "Liberty Financial has applied in the High Court to restrain information that NZF Group may provide to its shareholders in considering the sale and to compel the directors of NZF Group to make a positive recommendation to approve the sale."

Until the matter was heard in court in February next year, no vote could be held, it said.

The sale delay is another twist in the troubled life of NZF, whose assets remain frozen after legal action by receivers of its former finance company arm NZF Money, which collapsed in July last year owing debenture holders about $16.4m.

The High Court is due to hear proceedings in that case in February next year.

In March the Serious Fraud Office said it was investigating NZF Group over alleged related party transactions between members of the group, its directors and officers going back as far as 2006.

At its last balance date in September, NZF Group liabilities exceeded its assets by $5.5m.